Each month, we shine a spotlight on partners who are using budget advocacy to bring transformational change to their communities. This month, we talked with Rommel Rodríguez, Macroeconomics and Development Area Coordinator, and Jaime López, Transparency Researcher, both from the National Development Foundation (FUNDE) in El Salvador.
Q: What is FUNDE’s area of work and main aims?
A: FUNDE has four areas of work: Macroeconomics and Development, Transparency, Citizen Security, and Territorial (urban, rural, and environmental) Development. Our mission is to work for a fair, open, supportive, and sustainable society. Our vision is to generate innovative thinking, proposals, and actions in the field of development. In 2008, we started to work more on fiscal affairs from a macroeconomic lens, and more recently we began to focus more of our work on engaging the broader public in how budgetary matters impact their lives.
Q: Describe the partnership between FUNDE and the Central American Institute for Fiscal Studies (ICEFI)?
A: In general, it is a relationship based on mutual consultation. There have also been opportunities to collectively host events or advocacy activities. For example, FUNDE, ICEFI and other organizations recently made a joint statement on the possible loan agreement between the IMF and El Salvador and the use of bitcoin in the country. We also work together to co-lead the Citizen Oversight Committee of the Legislative Assembly of El Salvador, which is playing a critical oversight role in monitoring public spending on COVID relief.
Both organizations are part of the Global Initiative for Fiscal Transparency, the Latin American and Caribbean Tax Justice Network, and the Central American Tax Justice Network, and share an interest in promoting tax transparency and public participation in tax decisions. Together with eight other organizations from Central America, FUNDE and ICEFI recently created the Center Against Corruption and Impunity in the North of Central America, where we seek to address transparency and corruption in the governments of the Northern Triangle.
Q: What have you and FUNDE gained from the partnership with IBP and our training and advocacy initiative?
A: We’ve managed to increase pressure on the government to achieve greater budget transparency. The current administration in El Salvador, like the previous ones, avoids important public finance issues and needs to revise certain aspects of its handling of the national budget. For this, the support of the EU has been vital in its interactions with the Treasury and the requests it has channeled to El Salvador’s government about where budgetary improvements can be made. Thanks to the prestige and legitimacy of IBP, we have established a critical mass of actors and organizations interested in budget matters. Like other organizations working on open budgets, we have already carried out education and fiscal training but are limited by participants’ varied interests. The presence of IBP has made it possible to address the issue in a more structured manner and with a long-term vision. The term “transparency” has been used excessively in El Salvador to the point where it has lost its meaning. During our trainings and workshops with IBP, it is emphasized that we are specifically talking about “budget transparency”, which helps participants understand the issues more precisely and therefore take targeted action.
Q: How did El Salvador score on IBP’s COVID study? What are your main impressions?
A: The COVID study helped us think more systematically about financing for emergencies, in the context of the COVID-19 pandemic, and to use that process to highlight in very clear and discrete ways the processes that were followed as well as the lapses that occurred. For instance, government officials failed to follow the formal processes that exist for administering and authorizing the budget. We were able to highlight positive developments, such as the creation of the Citizen Oversight Committee in the legislature, as well as lapses, such as the fact that the government has not evaluated or published information on the impact of its relief package.
In fact, to this day the government still has not produced a specific document that accurately details its 2020 spending on COVID-19 relief. A budget expenditure report is available, but not a specific document for pandemic-related spending. The Citizen Oversight Committee has been focused on getting this information.
Although the creation of the Citizen Oversight Committee was a positive development, in practice some officials have been reluctant to provide timely and substantive information to the committee. This is happening despite the fact that the legislative decree that created the Committee allows for the committee to have unrestricted access to information and indicates that officials who fail to provide information should be sanctioned.
Q: What recommendations do you have for the government of El Salvador to improve accountability for COVID-related expenses?
A: After the initial lockdown, the government resumed monthly publications on its online portal, including for information regarding the execution and modification of the budget. The information is relevant but lacks detail; for example, it does not include the objective of specific expenditures. The information published on the government portal also lacks detail about the sources of financing, including tax or other contributions to the treasury, donations, external loans and financing, and the placement of securities, among other things.
The Ministry of Finance claimed that urgency is the reason it did not introduce loans through the standard budget process, which would have meant requesting that the Legislative Branch approve the additional resources into budget line items. Instead, they introduced new funds into the budget through an Executive Agreement. Nevertheless, executive agreements to allocate funds and/or modify the budgets of public entities through the Official Gazette must also be made public, without exception. To date, several of them are not public.
The public portal of Comprasal should be updated as soon as possible with information on COVID-related purchases. The Prevention and Mitigation of Disasters Fund and the Trust for the Economic Recovery of Salvadoran Companies, which is administered by the Development Bank of El Salvador, must also provide detailed information on their sources of financing, the distribution of funds, and the execution of expenses, as well as a public list of beneficiaries. This information must be made publicly available online.
This work forms part of IBP’s COAB initiative and is supported by the European Commission.